RATHURI NIWAS vs NEW INDIA ASSURANCE CO. LTD.

THE facts of this case are similar to the facts in the case of O.P. No. 58 of 1993. This is also a claim arising out of the damage caused to the hotel building known as Rathuri Niwas as a result of the earthquake in Uttarkashi which took place on October 19/20, 1991. Hotel Rathuri Niwas is a registered partnership firm which has started business with the financial assistance of the U.P. Financial Corporation. THE entire building was mortgaged to it. THE hotel was insured under a policy called "the Fire Policy A'' from the New India Assurance Co. Ltd. for a sum of Rs. 30 lakhs.

AS a result of the earthquake which took place in the night of October 19/20, 1991 extensive damages were caused to the hotel building. By a letter dated October 20, 1991, the Insurance Company was informed of the damage. The Insurance Company deputed M/s. Adarsh ASsociates to carry out the survey and also Shri R.N. Choudury, Ex-General Manager, (Engineering), National Industrial Development Corporation Ltd. to survey the damage caused to the building and make a report. According to the report given by R.N. Choudury on 26.10.1992 loss was of Rs. 2,09,731.28 Ps.

M/s. Adarsh Associates, Surveyors by their report date 15.12.1992 stated that the loss comes to Rs. 1,92,147.00.

BY this petition, the complainant, however, has claimed a sum of Rs. 46,17,678/- with interest @ 21% p.a. on account of the loss suffered by it. The case relating to Baghirathi Palace (i.e. Original Petition No. 58 of 1993) was taken up by this Commission for final hearing on 28th July, 1994. The complainant relied upon the two undated reports obtained by the complainant from two architects, Mr. B.B. Singh Negi; and B.L. Kashyap & Sons, Engineers and Contractors, who had estimated the damages to the building on a total loss basis at Rs. 33,37,560/- and 33,00,210/- respectively. The Commission directed the District Magistrate, Uttarkashi and the Assistant Geologist, District Task Force, Uttarkashi, to produce within one month all the inspection reports and the documents relating to geological and other inspection of the building known as Hotel Rathuri Niwas, Karkot, Uttarkashi, after the earthquake of 1991. The District Magistrate on April 26, 1994, forwarded a copy of the inspection report carried out on 15.3.1993 by Shri N.A. Ansari, Assistant Geologist and Shri Dayaram, Surveyor. The District Magistrate stated that there was no other inspection report available in his office in connection with the damage caused to hotel Rathuri Niwas by the earthquake. In the report it has been stated that the ground on which the hotel stood is not safe and stable for any building activity.

ON 28th July, 1994 the Original Petition was again taken up for hearing along with Original Petition No. 58 of 1993 (M/s. Rawat Brothers v. The Oriental Insurance Co. Ltd. & Ors.). An order was passed requesting the Director, Central Building Research Institute, Roorkee, to carry out an inspection of the buildings known as Hotel Bhagirathi Palace and Hotel Rathuri Niwas at Uttarkashi and assess damage suffered by the said buildings due to the earthquake. The Director was also asked to report whether the two buildings or either of them were capable of being repaired or rebuilt and the estimated expenditure that would have to be incurred for such repairs of the two buildings. This order, however, could not be carried out because the Central Building Research Institute, Roorkee informed the Commission that they will not be able to complete the work assigned to them within four months'' time. It further pointed out that to do the job they will require a payment of Rs. 4 lakhs. Apart from that the costs, charges and the expenses of their experts for boarding and lodging as well as for the purpose of carrying out the inspection will have to be paid. If these conditions were fulfilled they were willing to undertake the project assigned to them by the Commission. The parties, however, did not agree to pay this exorbitant fee of the Central Building and Research Institute and made an application to this Commission to dispose of the case on the basis of the records available to it. A joint application was made to this Commission for appointment of two experts to inspect the two hotel buildings and to examine the structural safety including the stability of the land underneath in its present condition after the earthquake, assess the damage if any, suffered by the said buildings and report whether aforesaid buildings or either of them were capable of being repaired or rebuilt. In case they were capable of being repaired or rebuilt the estimated expenditure that would have to be incurred. The experts were asked to give their estimated expenditure for this purpose. The two experts appointed to make a joint inspection were (i) Prof. S. Mittal, University of Roorkee, Roorkee and (ii) Shri K.D. Sehgal, J-76, Main Bazar, Rajouri Garden, New Delhi.

ACCORDING to Prof. S. Mittal to bring the building to its original position a total expenditure of Rs. 10.81 lakhs will be necessary as repair work. ACCORDING to the report given by K.D. Sehgal no cracks were observed to show that the foundation of the building was damaged. A plinth beam may be provided to even out any inequalities in foundation of kitchen before construction of walls. It was also reported that after necessary repairs, under strict technical supervision, the building could be made as safe and stable as if it has not been damaged in the earthquake. ACCORDING to K.D. Sehgal the total cost of repair would be Rs. 2,52,700/-. This damage of costs was made only for the building. It was observed by K.D. Sehgal that, "The hotel Rathuri Niwas was not designed to resist the seismic loads. By not doing so the owners have saved only about 8 to 10 per cent of the construction cost. Strengthening of the building against future earthquakes or disasters have not been commented upon as we feel it is outside the scope of present investigation".

PROF. Mittal observed as follows, "In the earthquake prone areas, plinth beam, lintel band, special position of doors and windows, etc. are some of the features by which the losses due to earthquake in the building can be prevented. But, in the building in question, no such provisions were made. The area being backward and also lack of finances with the people, proper technology is not used in the area by the hotel promoters. Moreover, the importance of technology was not felt by the local people as there was no earthquake during the past in the memory of people of the valley". Prof. Mittal opined, "In the absence of proper repair as suggested above, the building requires complete demolition and re-building in the interest of the safety of the pilgrims and the other people who come and stay in the hotel."

Therefore, Prof. Mittal and Mr. K.D. Sehgal both were of the view that the building could be repaired to its original position, but gave two divergent views about the costs involved. Mr. K.D. Sehgal specifically expressed the view that proper care has not been taken at the time of construction of the building for safety measure against earthquake that such construction of the building for safety measure against earthquake, that such measure possibly could be taken as already been indicated in the report of both Mr. Mittal and Mr. Sehgal. But, in this case, we have to make an estimate of the loss suffered by the hotel owner. The hotel owner, having failed to do so in the first instance, cannot possibly claim the cost of having an earthquake proof hotel from the Insurance Company. What the hotel owner did not do, but should have done will have to be done by the hotel owner himself. The steps indicated by Prof. Mittal to make the hotel earthquake proof must be undertaken by the hotel owner on his own. The Insurance Company will have to pay for the loss and damage to the existing building and not for making any improvement to it.

BUT, the question is what is the Insurance Company''s liability to pay. As we have noted in the earlier order, Original Petition No. 58 of 1993 that it is not possible to reconcile the two reports submitted by the two experts. It is also not fair to send the parties to Civil Court, after keeping the case pending with us for nearly five years. We tried to bring about a settlement between the parties but both the parties took an adamant attitude in the matter. Asking for a third report will not only delay but add further complications to the case. We have to find a way out. The estimate of damages caused to the hotel building as per Prof. Mittal is Rs. 10,81,000/- and as per Mr. Sehgal is Rs. 2,52,700/-. Justice will be done if we take the mean figure of Rs. 6,66,850/-. This is the only way, the problem can be solved in this case. The Insurance Company will pay to the respondent a sum of Rs. 6,66,850/- with interest at the rate of 12% p.a. from 1.3.1992. The interest will be payable till the actual date of payment. Each party will pay and bear its own costs. The Original Petition is finally disposed of as above. Original Petition disposed of.